TAYLOR: Operator of Halifax, Sydney casinos bets on future

A roulette wheel at the Halifax casino is seen in this file photo. Great Canadian Gaming Corp., which operates the Halifax and Sydney casinos, has picked up an option to continue for another 10 years. (TIM KROCHAK / Staff / File)

Despite an increasing number of young Nova Scotians leaving the province, the company that operates the Halifax and Sydney casinos has decided to pick up an option to continue for another 10 years.

An aging population is a concern for Great Canadian Gaming Corp. of Richmond, B.C., admits Bob MacKinnon, the recently appointed president and CEO of the Nova Scotia Provincial Lotteries and Casino Corp.

But the province’s demographic issues are not unique, MacKinnon told me in a phone interview Monday.

He had been acting CEO of the gaming corporation until his appointment to the full-time position last week.

Demographics is an issue for all casino operators across the country, he said.

According to the latest figures released by the gaming corporation, the casino’s payout to the province in the third quarter, which ended Dec. 31, was down.

The Halifax casino contributed $4.7 million to the provincial treasury, $300,000 less than the same quarter in 2012. The Sydney casino’s payment to the province was $1.8 million, $200,000 less than in the same quarter the previous year.

The provincial gaming corporation is expected to release its fiscal 2013-14 financials July 24.

In the meantime, Great Canadian’s fourth quarter, which ended Dec. 31, provides some added insight.

The company reported a seven per cent decline in Nova Scotia gaming revenue in its fourth quarter, compared to the same quarter the previous year.

Great Canadian’s financials show $8.4 million in gaming revenue from the Nova Scotia casinos in the fourth quarter of 2013, down $600,000 from gaming revenue it collected in the fourth quarter of 2012.

Hospitality and other revenue from the operation for the Nova Scotia casinos added up to $1.8 million, which was down $200,000 from the amount it collected in that category during the same period the previous year.

Great Canadian’s earnings before interest, taxes, depreciation and amortization — generally viewed as an indication of profitability — in Nova Scotia was $2.3 million in the fourth quarter of 2013, representing a decline of 26 per cent from the same quarter of 2012.

For full-year 2013, Great Canadian’s EBITDA from Nova Scotia operations was $11.1 million, compared to $11.4 million for 2012. Great Canadian reported total revenue of $41 million from Nova Scotia operations, compared to $41.8 million in 2012.

In the company’s first quarter, which ended March 31 this year, Great Canadian reported total revenue from the Halifax and Sydney casinos was $9.2 million, compared to $9.7 million in the same period of 2013.

Great Canadian reported to shareholders that EBITDA from the Nova Scotia operations in the first quarter was $2.1 million, the same as last year.

The company, which operates 17 gaming facilities, including 10 casinos, has been managing the Halifax and Sydney casinos since 2005 and had an option to extend the contract for another 10 years, beginning July 1, 2015.

MacKinnon said that under the terms of the contract, Great Canadian had from April 1 to June 30 to decide what it would do with the option.

If the company decided not to pick it up, the lotteries and casino corporation would have immediately started the hunt for a new operator.

About 460 people are employed at the Halifax casino and another 130 people are working in Sydney.

MacKinnon said Great Canadian will spend a total of $10 million before the end of next year on capital improvements at both Nova Scotia casinos.

Without getting into the specifics of the changes and upgrades Great Canadian may be planning, MacKinnon said the facilities have the appearance of casinos built before 2000 and are therefore in need of some updating.